The limitation period for claims in arbitration commences upon receipt of notice invoking arbitration, not from the breach date, and claims cannot be barred if defenses were not properly raised.

JUDGMENT

Vibhu Bakhru, J.

Introduction

1. Oil India Limited (hereafter `OIL') has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act') impugning an arbitral award dated 01.09.2020 (hereafter `the impugned award') rendered by an Arbitral Tribunal comprising of a Sole Arbitrator.

2. The respondent (hereafter `TCI') is an entity incorporated under the laws of Canada and thus, the impugned award was rendered in an International Commercial Arbitration within the meaning of Section 2 (1)(f) of the A&C Act. Concededly, the ground that an arbitral award is vitiated by patent illegality, as set out in Section 34 (2A) of the A&C Act is not available to OIL for setting aside the impugned award. It is OIL's case that the impugned award is in conflict with the public policy of India, to the extent that it allows TCI's claims, and therefore, is liable to be set aside in terms of Section 34 (2)(b)(ii) of the A&C Act.

3. OIL's challenge to the impugned award rests primarily on its contention that the claims raised by TCI are barred by limitation and the conclusion of the Arbitral Tribunal to the contrary, is manifestly erroneous. According to OIL, the impugned order is in contravention with the fundamental policy of Indian law on account of this error.

Factual Background

4. In May 2014, OIL issued a notice inviting bids for hiring of production testing services for exploratory wells in NELP-VI Block (MZ-ONN-2004-1) in Mizoram. TCI submitted its offer and by a Letter of Award (hereafter the LOA) dated 13.10.2014, OIL awarded the contract to TCI. Thereafter, on 26.02.2015, the parties entered into a formal agreement captioned "Contract No.: 6205782 for Hiring of Production Testing Services for Exploratory Wells in NELP-VI Block (mz-onn-2004-1) in Mizoram" (hereafter `the Agreement').

5. Pursuant to the LOA, OIL issued a notice dated 21.10.2014 calling upon TCI to mobilise its resources at the specified site (Well Aibawk-1 at Location MZ-3) by 28.01.2015 (the Mobilisation Notice).

6. OIL had entered into an Agreement as it was desirous of availing certain services described as "Surface Production Testing services, Well Activation/Stimulation/Killing services (using coiled tubing unit & nitrogen pumping unit), Tubing conveyed Perforation service and Slickline service (for bottom-hole PVT sampling and bottom-hole pressure & temperature survey)".

7. The term of the Agreement was for a period of one year extendable for an additional period of one year at the option of OIL. In terms of the Agreement, its duration was to be reckoned from the commencement date till the date of completion of the Well Testing Operations and/or upon issue of the Demobilization Notice by OIL.

8. The total contract price was agreed at USD 4,952,800/-.

9. On 06.01.2015, OIL sent an e-mail requesting TCI to defer mobilisation of equipment till 15.03.2015. OIL also indicated that the delay was on account of `slow drilling progress'. TCI responded by an e-mail dated 08.01.2015 informing OIL that it was accepting the delay in mobilisation by diverting the consignment and, holding it at various en-route locations. However, TCI also put OIL to notice that the said exercise was costing it demurrage for holding of the said units at various locations.

10. On 30.01.2015, T